Strong Bookings Drive Carnival’s Profit Outlook
Robust Second Quarter Performance
Cruise giant Carnival Corporation has reported an impressive second quarter, surpassing expectations with a surge in revenue, operating income, and bookings. The company saw a 17.7% jump in revenue to reach $5.78 billion, driven by higher ticket prices and onboard spending.
Despite disruptions caused by attacks in the Red Sea, Carnival’s net income soared to $92 million, a significant increase from the $407 million loss in the same period last year. The company’s adjusted net income surpassed management’s guidance by $170 million.
Full-Year Forecast Raised
Based on the strong second quarter results, Carnival has raised its full-year profit forecast for the second time this year. The company now anticipates adjusted earnings per share of about $1.18, up from the previous estimate of 98 cents.
This optimistic outlook reflects Carnival’s confidence in continued demand and its ability to maintain higher prices. The company also anticipates an adjusted profit of $1.15 per share for the third quarter.
Record Booking Levels
Carnival is witnessing a strong surge in bookings, with its cumulative booked position for both 2024 and 2025 reaching record highs in terms of price and occupancy. This positive momentum bodes well for the company’s future revenue generation.
“The company continues to experience strong bookings momentum driven by record booking volumes for 2025 sailings,” said Carnival CEO Josh Weinstein. “While still early, the cumulative advanced booked position for full year 2025 is even higher than 2024 in both price and occupancy.”
Analysts’ Insights
Analysts have praised Carnival’s strong performance but also raised concerns about its high debt load. Morgan Stanley maintained an Underweight rating on the stock due to Carnival’s weak pricing and high leverage.
However, other analysts remain optimistic about the company’s long-term prospects. Manika Premsingh of SA acknowledges the robust bookings but remains cautious due to the high leverage. Still, she believes that Carnival is well-positioned to manage capacity and reduce debt over the medium term.
Conclusion
Carnival’s impressive second quarter results and positive outlook have boosted investor confidence. The company’s ability to generate strong demand, coupled with its focus on cost control, positions it well for continued growth in the future.
However, investors should remain aware of the potential risks associated with the company’s high debt and expensive valuation. Careful analysis and monitoring of these factors will be crucial in evaluating Carnival’s investment potential.